Comparatively, few businesses get by without borrowing money. Ranging from the smallest start-ups to the largest multinational conglomerates, on-hand capital is rarely enough to leverage major growth and development opportunities.

Financial products and services for businesses are in short supply, though in all instances they have their unique pros and cons. Listed below are pointers as to why it is important to consider all available options before deciding which lending stream suits your business, your budget, and your objectives.

Borrowing from a mainstream lender

Most major high-street banks offer a variety of loans and other financial products for businesses. As a general rule of thumb, borrowing from a mainstream lender means submitting a convincing application with robust evidence of strong financial performance. How much you can borrow (and whether you will qualify in the first place) is established on the basis of your firm’s turnover, financial position, future projections, and so on. Your own experience and business acumen may also be taken into account, making mainstream lenders a less-than-ideal option for smaller and newer businesses.

Business bridging loans

Bridging finance can be ideal in instances where the funds are needed as quickly as possible. Depending on the size of the loan required and other key factors, a bridging loan can be arranged and accessed within 48 hours. In addition, bridging loan eligibility is assessed nearly exclusively on the basis of security, aka collateral. Specialist lenders are often willing to consider all types of properties and assets that would not be considered eligible by most mainstream lenders. Bridging finance is designed to be repaid within a matter of months, typically on the basis of a monthly interest charge of less than 0.5%.

Commercial property loans and mortgages

It may be possible to secure a mortgage or similar loan against a commercial property that is under your ownership. The amount you can borrow will be determined by the equity you have in your property, i.e., how much of the existing mortgage you have paid off. Commercial property loans can open the door to affordable monthly repayments, though they can be comparatively costly long-term and are typically available exclusively to those with a strong credit history.

Invoice factoring

This can be a surprisingly accessible, affordable, and flexible solution for small and large businesses alike. Invoice factoring essentially places a middleman between the business and its clients. When an invoice is issued by the business, the invoice factoring service immediately pays a proportion of its value, typically around 75%. When the client pays the balance of the invoice at a later date, the business collects the remaining 25% minus the costs of the service. Invoice factoring can be great for both avoiding and dealing with temporary or long-term cash flow issues.

Peer-to-peer borrowing

Lastly, P2P borrowing enables businesses to access competitive loans for all purposes directly from investors. P2P lending platforms eliminate the middleman from the equation, enabling those lending money to businesses to offer small and large sums of cash with much lower overall borrowing costs. P2P borrowing is also a viable option for applicants with a poor credit history, which may not be a key eligibility factor with some P2P lenders.

To learn more about the most competitive business borrowing options available or to discuss your requirements in more detail, contact a member of the team at Bridgingloans.co.uk for an obligation-free consultation.

Average property prices in the United Kingdom grew more in July than at any other time in the past 11 years, suggesting the housing market could recover much faster than predicted. According to the latest figures released by Nationwide, July brought about the biggest single-month increase in average house prices since August 2009.

The lender’s monthly House Price Index detailed annual property price growth in July of 1.5%, along with an equally impressive month-on-month uptick of 1.7%. This improvement in previous months’ performance is credited largely to a surge in activity among buyers and sellers, spurred by the relaxation of lockdown restrictions.

Speaking on behalf of Nationwide, chief economist Robert Gardner spoke with confidence that July’s impressive property price spike “reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.”

“The rebound in activity reflects a number of factors. Pent-up demand is coming through, where decisions taken to move before lockdown are progressing,” he continued.

“Attitude shifts may be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.”

He also highlighted an extract from Nationwide’s report, which suggests that a full 15% of all households across the UK are considering relocation due to their experiences during lockdown and shifting priorities.

“Moreover, social distancing does not appear to be having as much of a chilling effect as we might have feared, at least at this stage,” he stated.

The impact of the stamp duty holiday

Other economists have highlighted the effect of the recent stamp duty holiday introduced by the government, which has the potential to save homebuyers across the UK many thousands of pounds.

“It’s no coincidence that this upturn has come at the same time as the introduction of a stamp duty holiday on purchases up to £500,000 ($627,440),” said MT Finance director Tomer Aboody.

“Brexit and COVID-19 aside, stamp duty has been the biggest negative influence on the housing market in recent times since the introduction of higher rates on more expensive properties.”

“This has to be resolved and dealt with, or whatever bounce we have seen in the past few months will only be a temporary one.”

“The government not only has to look at extending the existing holiday but possibly making it permanent, while also looking at benefiting the higher end.”

As part of the government’s ongoing stimulus plan to restart the UK economy, Rishi Sunak confirmed early last month that the threshold for stamp duty in England will be raised from £125,000 to £500,000 on a temporary basis. As a result, approximately 90% of all home buyers in 2020 will pay no stamp duty at all, said Mr Sunak.

Nationwide’s Robert Gardner also spoke with confidence that the momentum in housing marketing shows no signs of slowing soon, at least.

“These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward,” said Gardner.

 

The United Kingdom is currently facing a period of uncertainty unlike any seen since the end of the Second World War. Considering Great Britain’s entirely uncertain position in Europe and the rest of the world over the coming years, it’s almost impossible to predict what’s to come next. Nevertheless, the latest figures have painted a less than reassuring picture about the country’s economic performance.

According to the latest figures from the Office for National Statistics, the United Kingdom economy experienced growth in May after a decline in April. However, not to such an extent as to quash widespread fears of a severe slowdown to come. Specifically, the economy experienced growth of 0.3% in May, following a decline of 0.5% in April. Total growth over the three months leading up to May came out at the same 0.3%.

This would appear to be a positive result, but experts are predicting further shrinkage in the months to come. The official figures for the second quarter are not scheduled to be released until August, though they are not expected to make a particularly reassuring reading.

Carmakers return to work

One of the key factors driving the temporary economic growth record in April was the partial return to production for several major carmakers. A series of temporary factory shutdowns ahead of a scheduled March Brexit inflicted enormous damage on the UK’s vehicle production output and the economy as a whole.

This partial recovery in car production contributed to the 0.3% economic growth recorded for May, which didn’t come close to making up for the decline in the previous month. Experts insist that all such monthly figures should be taken with a pinch of salt due to their volatility and unpredictability. Nevertheless, all signs indicate a further economic slowdown over the coming months in the run-up to another scheduled EU departure.

“We project UK growth to dip to 1.1% in 2019 and to strengthen only moderately, to 1.6% in 2020. Slow growth this year reflects the drag on business investment from ongoing economic and political uncertainty relating to the outcome of the Brexit process. Our main scenario assumes an orderly exit from the EU with a transition period, with business investment and GDP growth picking up later in 2019 and in 2020. But short-term risks are weighted to the downside due to the possibility of a more disorderly Brexit.” Price Waterhouse Coopers

The value of the pound has also plummeted more than 5% against the world’s three biggest currencies in recent weeks. A decline that is also predicted to continue for some time.

Growing brexit uncertainty

Had the government gotten its way, the United Kingdom would have already been outside the European Union for some time right now. As it stands, we’re no closer to knowing what’s ahead than we were at the time of the referendum. Uncertainty has had a more drastic and wide-reaching impact on the UK’s economic performance than anyone could have predicted.

As it stands, the United Kingdom is now scheduled to leave the European Union on or before October 31. Nevertheless, we’ve got no realistic way of even knowing who will be in power at the time. Or whether Brexit will actually go ahead or not. From the biggest businesses to the average UK household, nobody is willing to make any major financial decisions while such uncertainty continues. The result of this is the sluggish economic performance we’ve seen as of late, which isn’t likely to see a turnaround anytime soon.

At some point or another, we were all informed of the politeness (or otherwise) of asking other people how much they earn. It’s all part and parcel of growing up and getting into work—we’re programmed from an early age to avoid the subject of salary at all costs.

To such an extent that even in today’s enlightened and liberal 21st-century society, discussing our salaries can be the ultimate taboo.

But it seems the winds of change are blowing for a new generation of millennials, who, unlike their formal and stuffy predecessors, aren’t nearly as afraid to talk cash. In fact, a report published by The Cashelorette found that almost two-thirds of millennials (63%) between the ages of 18 and 36 have talked about their salaries with their family members. Moreover, 48% have discussed what they earn with their friends, and 30% have talked about their take-home pay with their co-workers.

By contrast, little over 40% of adults aged 53 to 71 stated that they discuss their salaries with family members, 21% shared salary information with their friends, and just 8% talked about what they earn with their colleagues at work.

This would seem to suggest that younger generations find it more socially acceptable to discuss salaries openly than older generations, but does this add up to a good thing? Are there positives to be taken from discussing salaries openly, or is it a personal and private subject that’s best kept under wraps?

The importance of workplace transparency

A number of experts have already shared their thoughts on the subject, and the majority have reached the same conclusion. In an organisational setting of any kind, transparency has the potential to be enormously positive. When members of a workforce share information about their salaries openly with others, there’s none of the typical scepticism and scrutiny that surrounds salary secrecy.

Roughly translated, if you know exactly how your pay compares to that of your peers, you understand your position and the extent to which you are valued. Assuming you’re all paid pretty much the same (in accordance with experience), knowing this makes it easier to feel part of a cohesive team and focus on the job accordingly.

By contrast, when workers have no idea how much their counterparts are being paid, they may assume they’re being underpaid and undervalued. Even if this isn’t the case, they’ve got no way of finding out for sure and could therefore reach misguided conclusions. It’s the classic case of ensuring everyone is on the same level and treated in the same way when doing the same job.

Of course, this isn’t the way the vast majority of businesses operate.

The issue of salary secrecy

From the moment new recruits are brought on board, salary secrecy can be problematic. For example, by keeping the salaries of employees secret, employers enjoy an enormous advantage during the negotiation process. The same also applies to interviews for promotion and general career development, wherein the applicant may accept a salary exponentially lower than that of their colleagues.

Salary secrecy is also blamed for the perpetuation of the wage gap between female and male employees. As there is no requirement for employees to openly discuss or disclose their salaries, men and women doing the same job can get away with receiving very different rates of pay.

Of course, confidentiality legislation provides employees and employers with certain protections regarding salary disclosure. Hence, it’s unlikely that sweeping reforms will be implemented anytime soon, resulting in complete disclosure and open discussion of salaries in the workplace.

Still, it’s reassuring to learn that younger generations are gradually eradicating the taboo that’s held back honest and open discussion for so long. If true equality in the workplace is to ever become a reality, open discussion of salaries could be an important part of the process.

We love it when we’ve got it, and we lament it when we haven’t. In any case, it’s rare to come across an individual who doesn’t appreciate the value of money.

But have you ever given thought to where the coins and notes in your pocket come from?

By this, we’re not talking about those oh-so-sophisticated machines down at the Royal Mint. Instead, we’re talking about the actual historical origins of money.

Here’s a brief overview of how the whole thing got started:

Trade via barter

Before money was invented, all business transactions had to take place by way of bartering. It was the case of swapping commodities of equal value with interested parties, which, for obvious reasons, was an imperfect and complicated system. Particularly given how different people assign different values to different commodities.

Eventually, it became clear that some rudimentary form of currency needed to be introduced.

Something that satisfies six essential requirements:

• Scarceness: For a form of currency to be viable, it has to be something that isn’t readily available. Rarity has always been a desirable trade for materials and commodities.
• Counterfeit proof: It’s also useless to have a form of currency that’s easy to duplicate. If you could print 100% authentic cash at home, you probably would.
• Portability: Trading commodities for commodities is one thing, but it’s not as if you can carry your livestock, your car, or your home around in your pocket. Hence, portability is key.
• Durability: Money tends to be exposed to pretty harsh treatment during its lifespan, calling for the use of a robust material to maximise durability.
• Divisibility: One of the biggest problems inherent in the bartering system is the fact that most standard commodities and assets aren’t divisible. Owing change in the form of half a goat presents a variety of problems.
• Desirability: Of course, for a form of currency to be deemed viable, it also needs to be in some way desirable. Precisely why most forms of historic currency have been rare, sought-after, and generally quite pretty to look at.

The dawn of modern currency

At some point in time, common sense brought about the use of precious metals to make coins. At the very dawn of modern currency, it was the quantity of the precious metal used to create the coin that determined its value.

Evidence suggests that the first coins produced as a form of currency emerged approximately 600 years ago in ancient Turkey. The Greeks followed suit approximately 100 years later, around the same time as the Chinese. Coins were crafted and introduced as a form of currency by the Romans after another century or so, which was around the same time the Celts in England introduced coin-based currency.

Denominations, materials, and manufacturing techniques may have evolved beyond recognition, but the same basic premise of exchanging coins for commodities underpins the way the world does business today.

The future of money

Some economists believe it’s only a matter of time until cryptocurrency takes over and wipes physical money off the face of the earth. A distinct possibility, but something that’s unlikely to happen in our own lifetimes.

Cryptocurrencies like Bitcoin may have enormous potential, but for the time being, they are simply too volatile and controversial to mount a global takeover. For a variety of reasons, people in general simply aren’t ready to permanently quit the cash-based currency system just yet.

So while you can expect to hear a lot more about cryptocurrency going forward, you can rest assured that the coins and notes in your pocket will hold their value for now.